DISHONEST CHAPTER 13 DEBTOR RIGHT TO DISMISS CASE NOT ABSOLUTE

Part 2

According to schedule B, debtor owned jewelry $50, however her ex-husband testified that she owned a diamond wedding ring set with a separately purchased center-diamond stone of 3.64 karats, a tennis bracelet, two diamond bracelets, a diamond necklace, a watch, and a cocktail ring. Further, the couple purchased a baby grand piano, which the debtor did not disclose in her schedules. The debtor testified that she was living with her mother, did not have the jewelry, and did not know what happened to it. This is known as the “selective amnesia” excuse. The piano, she said was given to movers. The court found that the debtor had clearly not been complete or forthright in her disclosures on schedule B and her Statement of Financial Affairs. “Although Debtor promised at her Section 341a meeting to amend these documents, no amendments have been filed,” the court said, adding that the debtor’s recounting of what she owned changes from one sworn statement to the next. “The debtor’s vague assertions of losing track of various pieces of diamond jewelry cannot be found sufficient to rebut the evidence that she had such items and either retains them today, or disposed of them within the period required to be disclosed under her Statement of Financial Affairs,” the court said, and found that the motion to dismiss was brought in bad faith. The court noted that the debtor could not be kept in Chapter 13 against her will, but also found that she did not have an absolute right to have her case dismissed.

“There is no indication in Section 1307(b) is intended to provide the dishonest debtor a right to misuse the protections of a bankruptcy case and then escape with impunity. Such result would permit abusive practices and render null and void any judicial power to prevent or protect against such fraudulent practices…” Case converted to Chapter 7!

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.